What Are the Different Types of Hiring Firms?

If you’ve spent more than a day looking for a job, you’d know that you don’t have to look particularly hard to find disappointment there. If it helps, I’ll have you know that even your dream company is struggling to find a suitable candidate. 

That said, hiring firms are the middlemen of the taxing process that is HR—serving as a conduit between potential candidates and a company’s internal recruiter. 

This article covers the various hiring firms, helping you decide which type best serves your interests.

Recruitment Agencies Vs. Employment Agencies

Most HR gurus would tell you that hiring or recruitment firms only exist to serve the employer’s interests, while employment agencies serve jobseekers’. Sure, professional job placement agencies’ MOs differ, but none would exist without both the employer and the jobseeker. 

Types of Recruitment Firms

The major differences can be seen in how recruiters go about candidate sourcing, assessment, development, and candidate-client management. Regardless of where you stand in the highly volatile job market, it pays to know what type of firing firms are out there and who is out to get you.

Executive Search Firms

Also known as retained search firms, they consist of professional third-party headhunters and talent scouts working on behalf of a hiring firm or employer to find the most suitable candidate for a specific role. Executive search firms are ideal for companies looking to fill sensitive, senior positions without advertising. 

You can read here about an executive hiring firm’s recruitment of a high-level bank employee.

Staffing Agencies

Staffing agencies operate much like search firms, except they do not pursue persons who are not actively looking for a job. The employer contacts the relevant staffing agency and outlines the number of employees needed, job requirements, employment period, and salary. The agency then drafts a job description and sources suitable candidates from an existing pool of applicants. They can also advertise the position on job boards.

Within staffing agencies are other types of hiring firms. They perform similar functions but with different employment terms. They include:

Temporary agencies: These are popular among companies looking for a short-term workforce. In this case, the staffing agency is the employer on record—issuing the paycheck and assuming labor-related legal liabilities. 

Niche/ Specialist Agencies: These are companies’ go-to hiring firms for highly specialized employee needs. They work just like headhunters but at a much lower level, helping specialist companies find niche-specific professionals.

Traditional Employment Agencies: These offer a wide variety of staffing services, including temporary staffing, mid-level recruiting, and employee management. Some, like contingency recruitment agencies, charge upon successful placement of a candidate. Their fees typically range from 15% to 30% markup of the new hire’s first-year salary. You think this is a lot? Guess again! 

Hiring internally costs companies $4,129 per hire, not to mention the 42 days that go into the hiring process.  

Choosing a Hiring Firm 

Finding the right recruitment firm is no easy task either. Hiring firms have a vested interest in the process, so be sure to hire a certified recruiter who will act in your best interest. This applies to both the employer and jobseeker.

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